Graph Diamonds: The Year in 5 Telling Charts

RAPAPORT... Data can be exhilarating. Earlier this week, Avi Krawitz,
Rapaport’s News Editor and Senior Analyst, called this reporter over to look at
his screen, as there was something exciting on it. The attraction was a line
chart of the RapNet Diamond Index (RAPI™) for 1-carat diamonds
throughout 2018, showing that the peak price on July 6 coincided exactly with
the day the US implemented its first China-specific tariffs. The index dropped through
the end of the year.

He later beckoned a few more colleagues over, and there was
soon a modest clamor of interest around his workstation. By the end of the day,
even the office administrator was asking, “Did you see that graph?”

Charts can, it appears, tell a story in ways that would
require many words. So we’ve decided to relive 2018 through five pieces of
visual data about the diamond and jewelry trade.

1. Small-stone prices
slumped in the second half.

The RAPI for 0.30-carat polished fell from an early-July
high point due to an oversupply, as well as macroeconomic factors such as the
US-China trade war, with the category usually popular in China. While there was a similar trend in
Avi’s 1-carat graph, the 0.30-carat category shows it more clearly. This index jumped
9.9% between January 1 and July 6, but ended the year down 1.1%.

Source: Rapaport

2. Traders embraced larger diamonds.

The industry focused on higher-value polished in response to
the weakness in the smaller categories. That was visible in India’s export
data, which showed growth in the average price of the nation’s outbound
polished shipments up to November.

Source: Gem & Jewellery Export Promotion Council;
Rapaport archives

3. Rough demand
followed suit.

Alrosa’s average rough-diamond selling price
increased 19% to $123 per carat in the nine months to September amid a shift in demand away from smaller goods toward larger stones. It also noted a 5.2% increase in like-for-like prices
during that period.

Source: Alrosa

4. An oversupply was driving the changes.

The midstream has struggled with a surplus of lower-value
goods since the Gahcho Kué, Renard and Liqhobong mines came on stream in late 2016 and
early 2017. Global rough production increased 19% to 150.9 million carats in
2017, according to Kimberley Process data. The number of unique stones listed
on RapNet jumped 24% during 2018.Source: Rapaport
5.
Memo deals became
more common.

Retailers increasingly prefer taking goods on consignment
(or memo), as it reduces their risk. However, this means suppliers don’t get
paid until their client makes a sale. Though this chart for Signet Jewelers
only goes up to 2017, it shows memo is becoming more central to the company’s
sourcing.